“If you don’t trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 – $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?”
– Kenneth J. Gerbino
Posts Tagged ‘Precious Metals’
The New Gold Rush: Certified Coins
Monday, November 16th, 2009There’s a silent rush by government central banks and gold bullion banks to secure all the certified gold coins they can at prices higher than current published rates. This especially applies to uncirculated gold coins of any year or face denomination certified as mint state 63 and below. There are a few reasons for this:
- 1. Certified and numismatic gold coins contain the actual physical gold content they say they do. They have been weighed and tested by the certification companies and are guaranteed by them to be authentic.
- 2. A fast growing amount of gold-plated alloy coin forgeries are being circulated. As most gold buyers don’t bother to weigh or test their purchases, these fake gold coins are quickly becoming rampant within the physical bullion coin market. Pawn shops, flea markets, and internet auction sites are the greatest purveyors of fiat gold coins.
- 3. Gold bullion bars held by governments, investments groups, banks, and gold warehouses have already been found to be forgeries. Tungsten and other metals are being discovered inside gold bars that have been carefully manufactured with alloys to match the same weight and density of an authentic gold bar. They have 24k (.999 pure) gold-plating on the outside, but contain no gold on the inside. They are such good forgeries that the most common way now being used to test gold bars is to drill into them for core samples.
- 4. Using private gold dealers to remain anonymous, governments are buying gold jewelry at premium prices. The reputable assayers in every country are backlogged and their smelters are working 24/7.
Whether or not gold is considered by anyone to be money, gold is undoubtedly the ultimate store of value. As a keeper of value, gold has always done well when governmental monetary policies or fiscal banking has failed. When a financial system is stable and the public confidence in government is high, gold value may lessen. That’s how history has recorded the value of gold without exception.
Bad politics and foolish governmental fiscal policies automatically cause gold to be perceived as a safe and high value. That’s why the FRN$ is loosing it’s perceived value while the actual value of gold is rising steadily.
Since many numismatic gold coins are now selling at top prices rather than at a 15-35% typical industry discount, then the value of gold bullion has risen beyond the current NYMEX or COMEX paper gold manipulated price charts.
After speaking with trusted coin dealers and private collectors I’ve known for many years, I’ve come to realize that the actual private market value placed on one certified ounce of gold is currently FRN$ 2,500. A month ago, it was FRN$2,000.
The value demanded by sellers of certified gold is rising each day, and at this rate of value increase I believe we will see an ounce of certified gold bringing FRN$ 3,000 by January 2010. These are not paper gold ETF prices. These are prices for certified physical gold.
Now it’s much easier for the public to understand why newspapers, magazines, and television are rampant with ads wanting to buy your gold jewelry.
UPDATE: November 19, 2009
http://www.tungsten-alloy.com/en/alloy11.htm
Gold IS Money
Tuesday, September 22nd, 2009Gold is money and nothing else - JP Morgan, testifying to the Pujo Committee, 1913
As JP Morgan pointed out early last century, gold is money, and nothing else. Grasp this simple fact and you understand gold. More to the point, gold is international money. It always has been. Over thousands of years of human economic interaction, gold (and silver) evolved as the chosen medium of exchange. These two precious metals contained all the qualities necessary to facilitate growing trade and economic interaction. The most important quality of course was man’s inability to create the metals out of nothing. Alchemists tried, but to no avail. This inability to manipulate supply made the metals perfect for the role of money.
Despite the efforts of governments and central banks around the world, gold has not gone away. It is still money.
Gold is rising because the international monetary system, with the US FRN$ dollar at its core, is in the process of breaking down. Decades of unfettered credit creation by the global banking system, led by the US, is now beginning to implode.
Gold is being swept off the market by millions of individuals who know that without fail governments always ruin the value of their paper money. Governments have always resented gold because when freely traded, its price tells the story of bureaucratic ineptitude.
Gold Outperforms Cash
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